The McDuffie County School Board unanimously approved the go ahead for the issuance of bonds during their regular meeting last Thursday night. Voters approved the coupling of bonds with Educational Special Purpose Local Option Sales Tax IV at a special election last September.
As previously reported By The Mirror, coupling the sale of bonds with the ESPLOST will allow the school system to start projects immediately without waiting for penny-tax receipts to come in. The Morgan Keegan and Company brokerage firm will sell the bonds for the school system. A representative of the brokerage firm, Tom Owen, was at the meeting Thursday to explain the bonds to the board members.
"You are a good candidate to borrow for short term because ESPLOST gives you a good cash flow for paying back on time," he said.
Mr. Owen said low-range bond issues such as McDuffie County's are sold to banks.
"And we have more than 800 retail salesmen who will be out selling these, so it won't be a problem," Mr. Owen said.
The board approved borrowing $12 million, but the system will begin By borrowing only $8 million. The projected closing date is August 1. The money will be put in the bank to earn interest until it is needed in October. The board discussed with Mr. Owen the practicality and possibility of selling the bonds to local banks.
The bond amount is due to be paid back By May 2012, and will be paid back using ESPLOST monies. The money is being used for the construction of the new junior high school on White Oak Road, beginning the new Norris Elementary building and renovations to the Brickyard. Mr. Owen said the school system can borrow the remaining $4 million at any time when it is needed.
The City/County Water and Sewerage Department already uses bonds to pay for projects. Thomson Mayor Bob Knox - who also serves as the school system's attorney - encouraged the school board in a planning meeting last year, telling them bonds and SPLOST funds were successful in McDuffie County because of the interstate access, the super Wal-Mart and people coming in to work from out of town.